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Project A has an initial cost of $80,000 and provides cash inflows of $34,000 a year for three years. Project B has an initial cost of $80,000 and produces a cash inflow of $114,000 in year three. The projects are mitially exclusive. Which project(s) should you accept if the discount rate is 11.7 percent? What if the discount rate is 13.5 percent? A. Accept A as it always has the higher NPV. B. Accept B since it has the greatest total cash flow. C. Accept A at 11.7 percent and B at 13.5 percent. D. Accept B at 11.7 percent and A at 13.5 percent. E. Accept A at 11.7 percent and neither at 13.5 percent.

Financial Management, Finance

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